Convergence to Re Shape the Physical Security Industry

Transcription

1 Convergence to Re Shape the Physical Security Industry Impact Analysis on the Global Security Market Birmingham, May 2010

2 Agenda Definition of Convergence Drivers and Restraints Regulations and Standards Migration to IP Impact on the Market Supply Side End users Impact on Sales Strategy Conclusion 2

3 Technology Convergence to Cause an Operational and Functional Convergence 3

4 Security, IT and Building Control Convergence as Integral Part of the Evolution Towards Smart Cities Disparate Building Controls Functional Controllers HVAC Control Building Management & Control Building Automation Energy Management Systems Integration Home Automation IT Convergence Green Buildings Security Convergence Intelligent Buildings Intelligent Green Buildings Integrated Networking Enhanced Management Smart Buildings Energy Control Smart Towns Fact The need for interconnecting facilities and accessing real time data is driving convergence between building control systems, security systems and Information Technology (IT) systems. Implications Large building management system providers such as Schneider, Siemens, Bosch to provide one stop solutions. Challenges Buildings automation system as well as security system integrators and manufacturers need to bridge the gap between the building automation, the security and the IT world (and vice versa), adopt open standards, move away from proprietary solutions and adopt a best of breed one. Manufacturers will need to find new ways to differentiate their offerings. 4

5 Convergence Crucial Part for the Migration to Smart Cities Key Features Virtual power plants Optimised use of capacity, Advanced metering infrastructure Digital intelligence, remote control, micro grids Growth Enablers Smart metering Regulation Energy price signals and storage Integrated communications, sensing & measurement Smart Grid Key Features Growth Enablers Smart Building Smart service delivery (security, safety, health, education etc.) Inter connectivity between buildings and communities Shared efficiency gains IP networks and affordable broadband Real time network visualisation Inter connected advanced metering infrastructure Buy in from city leaders Key Features Fully automated, connected, digital buildings Fully converged and integrated building controls, physical and logical security systems Growth Enablers Open architecture Advanced building design Software tools, analysis & reporting Connectivity of devices, networks of ubiquitous sensors Smart City 5

6 Technology is a Driving Factor However Unclear ROI and Lack of Channel Competency are Limiting Speed of Convergence Very Certain Growing Demand for Automated and Low Latency Analysis of Physical Events and Real Time Access to Distributed Information Sources Need for Security, end to end Identity Management and Catastrophe Resiliancy to Drive Demand Lack of Channel Competency Limiting Fast paced Adoption Use of Security and Building Control Systems beyond Traditional Applications ( Centres (Transformation into Profit Unclear accountability process if fault/failing of system Benefits of IP in Handling Data and Providing Common Platform Difficulty in Transforming Functionally Narrowly Focused Individuals to Become Multi Disciplinary Experts Uncertain Economic Climate Huge Legacy Infrastructure to Restraint IP Migration and Convergence Unimportant Critical Privacy Issues especially in having multiple transparent databases Unclear Benefits/Perceived High TCO or no clear ROI for converged/integrated systems Technology Limitations and Limited Integrability Still Barriers for Widespread Adoption Lack of Standardization Energy Efficiencies and Savings in Green/Smart Buildings 6 Market Drivers Regulation Market Restraints Very Uncertain Source: Frost & Sullivan

7 Increasing Regulations and Growing Standards Play a Key Role in Driving Convergence Regulation NERC/CIP PCI (Payment Card Industry) Compliance Basel II Sarbanes Oxley Act (SOX) Federal Information Processing Standards Publication 201 Gramm Leach Bliley Act (GLBA) Health Insurance Portability and Accountability Act (HIPAA) HSPD 12 Data Protection: Act / 2006/24/EC / 2002/58/EC / 95/46/EC Energy Efficiency: The Energy End Use Efficiency and Energy Services Directive (ESD) Directive (2006/32/EC) Directive on the Energy Performance of Buildings Energy Using Products (Ecodesign) Directive (EuP) Standards SAML (Security Assertion Markup Language) BACnet Federal Information Processing Standards (FIPS) Publication 201 Lightweight Directory Access Protocol (LDAP) Simple Object Access Protocol (SOAP) Open Network Video Interface Forum (ONVIF) Physical Security Interoperability Alliance (PSIA) KXN PHYSBITS (Physical Security Bridge to IT Security) Modbus Lonworks IEEE 802.3af (PoE) Increasingly regulation is playing a pivotal role towards advanced ID Management in the Governmental and critical infrastructure markets Energy efficiency playing a key role in the smarter use of building controls and security systems When open standards will replace proprietary solutions end users in the enterprise world will see clear advantages in integrated systems 7

8 IP Migration is Crucial for Convergence and is Proving Much Slower Than Initially Expected Video Surveillance Cameras Market: Revenue Forecasts by Analogue vs IP (Europe), Revenues ($ Million) Frost & Sullivan estimates the IP to takeover analogue between 2011 and This still leaves a huge installed base of analogue systems Convergence as a slow evolution and not a radical transformation Year Analogue Revenues ($ Million) IP Revenues ($ Million) Source: Frost & Sullivan Roadblocks to Migration to IP in Video Surveillance Perceived high cost and lack of compelling business cases Initially inflated expectations in terms of delivery and integration/system capabilities In mature markets huge installed base of legacy analogue systems Proprietary solutions and lack of standardization Lack of IP infrastructure in many emerging and some mature markets 8

9 M&A Activity as a Quick Way to Bridge the Knowledge Gap For Many Players Looking at Convergence Market Security and Defence Energy/ Infrastructure IT/ Telecom Building Automation Manufacturers Integrators 9 Collaboration to Brigde IP Knowledge Gap Push R&D/ Innovation Diversification M&A Vertical integration Enhanced importance Integrators Competence destruction Capability reconfiguration

10 After a Few Mixed Results in the Security Market IBM Has Proven Successful as Provider of Advanced Analytics Physical Security Value Chain PRODUCT OEM/ODM DISTRIBUTION & SERVICE PROVIDERS Fire Detection Consultant IT System Integrators Intrusion Detection PSIM System Integrators Video Surveillance Video Analytics Wholesale Manned Guarding Access Control Distributors Monitoring Stations Perimeter Protection Video Management SW Installers RFID IT Distributors Resellers United Kingdom: All England Lawn Tennis and Croquet Club (Wimbledon) Finland: smarter military engagements Chicago, U.S.: Operation Virtual Shield Italy: Railway Network Security and Emergency Centre for Madrid Pathmark is testing IBM's Smart Surveillance at 10

11 Move from Single Products to Solutions Results in a Change in the Decision Making Process within End Users P R O D U C T Manned Localized Monitoring Solutions Analogue Based Systems Manned Guarding Non Intelligent Systems Hybrid Solutions Remote Alarm Monitoring Limited IT Penetration Event based/ Preventive Enterprise wide Integration Complete IT Integration Remote Video Monitoring Remote Maintenance and Management Automated and Networked Systems S O L U T I O N End Users Changing decision makers move into the IT, marketing, operations and financial (compliance) departments and/or creation of new professional figures looking at physical security Security systems to become a profit centre with increasingly complex systems which require a different purchasing approach Migration from price lead decision making to TCO and ROI 11

12 Sales Strategy Impact of the Move from Selling Product to Selling Solution What does this change imply? From one off sales to ongoing service agreements Saas/VaaS models Stronger role of system integrators and closer interaction of manufacturers with end users to create vertical specific products/solutions. i.e.one stop shop in terms of integration/product/consulting capabilities Actions Vendors are Taking M&A and/or integrators and manufacturing companies acquiring talent from IT world Companies retraining the sales personnel to sell service packages instead products. Vendors trying to understand end user requirements to tailor products decisions moving from the engineering department to the marketing/strategy one Companies reorganizing their marketing department Long Term Evolution Shift to a service and solution oriented market Reduced importance of pure box movers (end users will be able to buy standard/basic products online) Extremely low margins on products Service contract will become longer and security will usually be part of a much broader offering ROI and TCO and not product or single service price to become the main differentiator Selling process to become increasingly complex 12

13 Contacts Matia Grossi Research Manager Electronics and Security +44 (0)